Correlation Between Tekla Healthcare and Dreyfus Treasury
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Dreyfus Treasury at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Tekla Healthcare and Dreyfus Treasury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tekla Healthcare Opportunities and Dreyfus Treasury Securities, you can compare the effects of market volatilities on Tekla Healthcare and Dreyfus Treasury and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Tekla Healthcare with a short position of Dreyfus Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Dreyfus Treasury.
Diversification Opportunities for Tekla Healthcare and Dreyfus Treasury
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tekla and Dreyfus is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Dreyfus Treasury Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Treasury Sec and Tekla Healthcare is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Tekla Healthcare Opportunities are associated (or correlated) with Dreyfus Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Treasury Sec has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Dreyfus Treasury go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Dreyfus Treasury
Considering the 90-day investment horizon Tekla Healthcare Opportunities is expected to generate 0.99 times more return on investment than Dreyfus Treasury. However, Tekla Healthcare Opportunities is 1.01 times less risky than Dreyfus Treasury. It trades about 0.03 of its potential returns per unit of risk. Dreyfus Treasury Securities is currently generating about 0.02 per unit of risk. If you would invest 1,680 in Tekla Healthcare Opportunities on September 26, 2024 and sell it today you would earn a total of 246.00 from holding Tekla Healthcare Opportunities or generate 14.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.61% |
Values | Daily Returns |
Tekla Healthcare Opportunities vs. Dreyfus Treasury Securities
Performance |
Timeline |
Tekla Healthcare Opp |
Dreyfus Treasury Sec |
Tekla Healthcare and Dreyfus Treasury Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tekla Healthcare and Dreyfus Treasury
The main advantage of trading using opposite Tekla Healthcare and Dreyfus Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Dreyfus Treasury can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Dreyfus Treasury will offset losses from the drop in Dreyfus Treasury's long position.Tekla Healthcare vs. Tekla Healthcare Investors | Tekla Healthcare vs. Tekla Life Sciences | Tekla Healthcare vs. Cohen Steers Reit | Tekla Healthcare vs. XAI Octagon Floating |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
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